U.S. Markets Update On October 23rd, 2019

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U.S. Markets Update On October 23rd, 2019

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Dollar up against Sterling, Euro on revived Brexit fears,Wall street falls, Gold holds tight range, Oil rises on optimism about prospects for a US-China deal - October 23rd, 2019.

Market Roundup

• Chinese vice foreign minister says progress made in trade talks

•  UK's Johnson to push for election if Brexit timetable rejected

• Canada Aug Core Retail Sales (MoM) -0.2%, 0.1% forecast, -0.1% previous

• Canada Aug Retail Sales (MoM) -0.1%, 0.5% forecast 0.6%  previous

• US Redbook (YoY) 4.3%  , 4.1% previous

• US Redbook (MoM) -0.1%,-0.2% previous

• US Sep Existing Home Sales 5.38M, 5.45M forecast, 5.50M  previous

• US Sep Existing Home Sales (MoM) -2.2%,-0.7% forecast,, 1.5% previous

• US Oct Richmond Manufacturing Index 8, -7 forecast,, -9 previous

• US Oct Richmond Manufacturing Shipments 4, -14 previous

• US Oct Richmond Services Index 24, 6 previous

• US Sep Federal Tax Revenue 113.93B, 119.95B previous

Looking Ahead - Economic Data (GMT) 

• 21:45 Sep New Zealand Exports 4.13B     previous

• 21:45 Sep New Zealand Imports 5.69B previous

• 21:45 Sep New Zealand Trade Balance (YoY) -5,480M previous

• 21:45 Sep New Zealand Trade Balance (MoM) -1,112M, -1,565M previous

• 05:00   Japan BoJ Core CPI (YoY) 0.4% previous

Looking Ahead - Events, Other Releases (GMT)

No significant event

Currency Summaries

EUR/USD: The euro little changed against dollar on Tuesday, as traders waited for the British parliament to vote on the Withdrawal Agreement Bill as it will shine light on when and how Britain will exit the EU.The United Kingdom is expected to leave the European Union on Oct. 31, but the deal Prime Minister Boris Johnson and his European counterparts agreed last week has not been yet voted on in the Britain’s parliament, which forced Johnson to request an extension to the leaving date from Brussels. The euro was flat at $1.1133 after rising to a two-month high against the dollar on Monday. Against a basket of six major currencies, the greenback was neutral at 97.32. Immediate resistance can be seen at 1.1137 (100 DMA), an upside break can trigger rise towards 1.1180 (Higher BB).On the downside, immediate support is seen at 1.1080 ( 9 DMA) , a break below could take the pair towards 1.1000 (Psychological level).

GBP/USD: Sterling dipped against the dollar on Tuesday, as markets priced in some uncertainty before crucial parliament votes on the government’s Brexit withdrawal bill that will determine whether Britain can leave the European Union on Oct. 31. The prime minister would need to win a vote to trigger an early election because one is not scheduled until 2022. That looks unlikely given he lacks a majority in the House of Commons. The pound was last trading down 0.47 percent up at $1.2897, having earlier reached $1.2997. A weaker dollar also supported the British currency. Immediate resistance can be seen at 1.3010 (Higher BB), an upside break can trigger rise towards 1.3050 (May 13th High).On the downside, immediate support is seen at 1.2774 (9 DMA), a break below could take the pair towards 1.2674 (11 DMA).

USD/CAD: The Canadian dollar weakened against the greenback on Tuesday and its heavily weighted energy sector fell on the Toronto stock market, as investors worried that a minority government would make building of new oil pipelines more difficult. Canada’s energy industry saw its worst-case election result materialize on Monday as the Liberals failed to secure a majority government, leaving them in need of support from left-leaning parties that are opposed to new oil pipelines. At   (1955 GMT), the Canadian dollar was trading 0.1% lower at 1.3108 to the greenback, or 76.29 U.S. cents. Immediate resistance can be seen at 1.3120 (5 DMA), an upside break can trigger rise towards 1.3171 (9 DMA).On the downside, immediate support is seen at 1.3067 (Lower BB), a break below could take the pair towards 1.3000 (Psychological level).

USD/JPY: The dollar weakened against the Japanese yen as cautious investors adopted a cautious approach ahead of a crucial Brexit vote. British Prime Minister Boris Johnson faces two pivotal votes in parliament that will decide whether he can deliver on his pledge to lead Britain out of the EU in nine days’ time.Lawmakers vote around 1800 GMT on the 115-page Withdrawal Agreement Bill and then on the government’s extremely tight timetable for approving the legislation. Federal fund futures imply that traders see a 89% chance for a 25 basis-point rate cut by the U.S. central bank in its month-end monetary policy meeting. Strong resistance can be seen at 109.00 (Psychological level), an upside break can trigger rise towards 109.30 (Higher BB).On the downside, immediate support is seen at 108.47 (9 DMA), a break below could take the pair towards 108.27 (11 DMA).

Equities Recap

  • Mixed earnings reports kept a lid on European stocks, with London’s midcap index suffering from doubts over whether British lawmakers will back the government’s Brexit bill on Tuesday.
  • UK's benchmark FTSE 100 closed up by 0.68 percent,  Germany's Dax ended down  by 0.5 percent, France’s CAC finished the day down by 0.17 percent.
  • The S&P 500 and Dow Jones indexes rose on Tuesday, lifted by upbeat corporate earnings reports that eased concerns over the fallout from the U.S.-China trade war, but a decline in shares of Facebook hurt the Nasdaq.
  • Dow Jones closed down by 1.99 percent, S&P 500 ended down 1.657 percent, Nasdaq finished the day down by 1.64 percent.

Treasuries Recap

  • U.S. long-dated Treasury yields dropped from five-week highs on Tuesday, in line with falls in yields globally, as investors turned cautious and awaited further news on Britain’s eventual exit from the European Union and more details about the U.S.-China trade deal.
  • U.S. 10-year note yields fell to 1.769% from 1.792% late on Monday. Earlier in the global session, 10-year yields hit a five-week high of 1.81%.
  • Yields on 30-year bonds were down at 2.253%, from 2.284% on Monday, touching a five-week peak earlier of 2.299

Commodities Recap

  • Gold steadied in a tight range on Tuesday as investors adopted a cautious approach ahead of a crucial Brexit vote, while focus shifted to the U.S. Federal Reserve’s stance on interest rate cuts.
  • Spot gold was steady at $1,484.60 per ounce as of 1:41 p.m. EDT (1741 GMT). U.S. gold futures settled mostly unchanged at $1,487.5.
  • Oil prices rose on Tuesday buoyed by prospects of a trade deal, but concerns about demand limited the gains.
  • Oil prices rose on Tuesday buoyed by prospects of a trade deal, Brent crude oil was up 39 cents at $59.35 a barrel by 2:07 p.m. EDT (1807 GMT), while U.S. West Texas Intermediate crude was 76 cents higher at $54.07 per barrel but concerns about demand limited the gains.

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